Elks v Melgear Pty Ltd (No 2) - [2023] QSC 207

SUPREME COURT OF QUEENSLAND

CITATION:

Elks v Melgear Pty Ltd & Ors (No 2) [2023] QSC 207

PARTIES:

ALEXANDER JASON ELKS

(applicant)
v
MELGEAR PTY LTD
ACN 056 330 646
(first respondent)
DARRYL EDWARD KIRK AND MATTHEW LESLIE JOINER IN THEIR CAPACITY AS RECEIVERS FOR MRV METALS PTY LTD ACN 610 100 402 (IN LIQUIDATION) (RECEIVERS APPOINTED)
(second respondents)
PHILIP ANTHONY FEITELSON
(third respondent)

FILE NO:

BS No 12986 of 2021

DIVISION:

Trial Division

PROCEEDING:

Originating Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

11 September 2023

DELIVERED AT:

Brisbane

HEARING DATE:

Head on the papers. Submissions filed by the respondents on 18 August 2023. Submissions filed by the applicant on 22 August 2023. Submissions in reply filed by the respondents on 28 August 2023.

JUDGE:

Cooper J

ORDERS:

1.   By 11 December 2023, the second respondents must determine the entitlements of all claimants to the fund held by them (fund) in accordance with:

(a)   these orders;

(b)   the reasons for judgment of Cooper J dated 14 July 2023;

(c)    the transaction documents (as that term is defined in the Security Trust Deed of the Moreton Security Trust dated 24 May 2017); and

(d)   any other legal or equitable claim to the fund.

2.   The second respondents must:

(a)   provide notice to the applicant and the third respondent of the determinations made pursuant to paragraph 1 of these orders within seven (7) days from the making thereof;

(b)   distribute the fund in accordance with the said determinations within twenty-one (21) days from the making thereof.

3.   The second respondents have liberty to apply to the court on 3 days’ notice for directions or judicial advice in respect of the determinations referred to in paragraph 1 of these orders or the distributions referred to in paragraph 2(b) of these orders.

4.   Subject to paragraph 5 of these orders, the first and second respondents’ costs of the proceeding are to be paid on an indemnity basis out of the fund.

5.   The first and second respondents’ costs payable in accordance with paragraph 4 of these orders are to be borne first by the share of the fund to which the applicant is entitled and, secondly, if that share is exhausted, by the applicant.

6.   The applicant is to pay the third respondent’s costs of the proceeding on the standard basis to be assessed if not agreed.

CATCHWORDS:

CORPORATIONS – RECEIVERS, CONTROLLERS AND MANAGERS – PRIORITY OF DEBTS – GENERALLY – where judgment was delivered ordering that the originating application be dismissed – where directions were made for the parties to file written submissions as to the form of directions – whether the directions should prescribe timeframes for the receivers to take various steps – whether the directions should prescribe the manner in which a sum is to be distributed – whether the directions should require, upon distribution of the fund, steps to be taken to cause the trust to vest – whether the directions should provide for the receivers to have…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] QSC 207
Decision Date: 11 September 2023

CaseChat Overview and Summary

In Elks v Melgear Pty Ltd (No 2), the parties were involved in a dispute over the priority of debts and the distribution of funds from a security trust. The case was heard by the court, which was required to determine several legal issues. The court needed to decide whether specific directions should be given regarding the timeframes for receivers to take certain steps, the manner in which a sum was to be distributed, the steps to be taken to cause the trust to vest upon distribution of the fund, and whether the receivers should be allowed to apply for further directions and judicial advice. Additionally, the court had to resolve questions regarding the costs associated with the proceedings, including whether the first and second respondents' costs should be paid on an indemnity basis out of the fund and whether the applicant should pay the third respondent's costs on the standard basis.

The court reasoned that there was no basis to depart from the usual rule that costs should follow the event. Given that Mr Elks was unsuccessful in his application, he was ordered to pay Mr Feitelson's costs on the standard basis. The court provided detailed directions for the second respondents to determine the entitlements of all claimants to the fund, to notify relevant parties of these determinations, and to distribute the fund within specified timeframes. The court also granted the second respondents the liberty to apply for further directions or judicial advice, subject to certain notice requirements. Regarding costs, the court ruled that the first and second respondents' costs should be paid on an indemnity basis out of the fund, with priority given to the share of the fund to which the applicant was entitled. The applicant was to pay the third respondent's costs on the standard basis.

These orders were designed to ensure clarity and fairness in the distribution of the fund and the allocation of costs, reflecting the court's consideration of the legal principles and the specific circumstances of the case.

Orders

Orders of the court

1. By 11 December 2023, the second respondents must determine the entitlements of all claimants to the fund held by them (fund) in accordance with:

(a) these orders;

(b) the reasons for judgment of Cooper J dated 14 July 2023;

(c) the transaction documents (as that term is defined in the Security Trust Deed of the Moreton Security Trust dated 24 May 2017); and

(d) any other legal or equitable claim to the fund.

2. The second respondents must:

(a) provide notice to the applicant and the third respondent of the determinations made pursuant to paragraph 1 of these orders within seven (7) days from the making thereof;

(b) distribute the fund in accordance with the said determinations within twenty-one (21) days from the making thereof.

3. The second respondents have liberty to apply to the court on 3 days’ notice for directions or judicial advice in respect of the determinations referred to in paragraph 1 of these orders or the distributions referred to in paragraph 2(b) of these orders.

4. Subject to paragraph 5 of these orders, the first and second respondents’ costs of the proceeding are to be paid on an indemnity basis out of the fund.

5. The first and second respondents’ costs payable in accordance with paragraph 4 of these orders are to be borne first by the share of the fund to which the applicant is entitled and, secondly, if that share is exhausted, by the applicant.

6. The applicant is to pay the third respondent’s costs of the proceeding on the standard basis to be assessed if not agreed.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Instead, I am satisfied that as between Mr Elks and Mr Feitelson there is no reason to depart from the usual rule that costs should follow the event. As Mr Elks was unsuccessful in his application he should pay Mr Feitelson’s costs on the standard basis.Conclusion For these reasons, the orders I will make are:1.By 11 December 2023, the second respondents must determine the entitlements of all claimants to the fund held by them (fund) in accordance with:(a) these orders;(b) the reasons for judgment of Cooper J dated 14 July 2023;(c) the transaction documents (as that term is defined in the Security Trust Deed of the Moreton Security Trust dated 24 May 2017); and(d) any other legal or equitable claim to the fund.2.The second respondents must:(a) provide notice to the applicant and the third respondent of the determinations made pursuant to paragraph 1 of these orders within seven (7) days from the making thereof;(b) distribute the fund in accordance with the said determinations within twenty-one (21) days from the making thereof.3.The second respondents have liberty to apply to the court on 3 days’ notice for directions or judicial advice in respect of the determinations referred to in paragraph 1 of these orders or the distributions referred to in paragraph 2(b) of these orders.4.Subject to paragraph 5 of these orders, the first and second respondents’ costs of the proceeding are to be paid on an indemnity basis out of the fund.5.The first and second respondents’ costs payable in accordance with paragraph 4 of these orders are to be borne first by the share of the fund to which the applicant is entitled and, secondly, if that share is exhausted, by the applicant.6.The applicant is to pay the third respondent’s costs of the proceeding on the standard basis to be assessed if not agreed.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Elks v Melgear Pty Ltd & Ors (No 2) [2023] QSC 207
PARTIES:	ALEXANDER JASON ELKS (applicant) v MELGEAR PTY LTD ACN 056 330 646 (first respondent) DARRYL EDWARD KIRK AND MATTHEW LESLIE JOINER IN THEIR CAPACITY AS RECEIVERS FOR MRV METALS PTY LTD ACN 610 100 402 (IN LIQUIDATION) (RECEIVERS APPOINTED) (second respondents) PHILIP ANTHONY FEITELSON (third respondent)
FILE NO:	BS No 12986 of 2021
DIVISION:	Trial Division
PROCEEDING:	Originating Application
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	11 September 2023
DELIVERED AT:	Brisbane
HEARING DATE:	Head on the papers. Submissions filed by the respondents on 18 August 2023. Submissions filed by the applicant on 22 August 2023. Submissions in reply filed by the respondents on 28 August 2023.
JUDGE:	Cooper J
ORDERS:	1. By 11 December 2023, the second respondents must determine the entitlements of all claimants to the fund held by them (fund) in accordance with: (a) these orders; (b) the reasons for judgment of Cooper J dated 14 July 2023; (c) the transaction documents (as that term is defined in the Security Trust Deed of the Moreton Security Trust dated 24 May 2017); and (d) any other legal or equitable claim to the fund. 2. The second respondents must: (a) provide notice to the applicant and the third respondent of the determinations made pursuant to paragraph 1 of these orders within seven (7) days from the making thereof; (b) distribute the fund in accordance with the said determinations within twenty-one (21) days from the making thereof. 3. The second respondents have liberty to apply to the court on 3 days’ notice for directions or judicial advice in respect of the determinations referred to in paragraph 1 of these orders or the distributions referred to in paragraph 2(b) of these orders. 4. Subject to paragraph 5 of these orders, the first and second respondents’ costs of the proceeding are to be paid on an indemnity basis out of the fund. 5. The first and second respondents’ costs payable in accordance with paragraph 4 of these orders are to be borne first by the share of the fund to which the applicant is entitled and, secondly, if that share is exhausted, by the applicant. 6. The applicant is to pay the third respondent’s costs of the proceeding on the standard basis to be assessed if not agreed.
CATCHWORDS:	CORPORATIONS – RECEIVERS, CONTROLLERS AND MANAGERS – PRIORITY OF DEBTS – GENERALLY – where judgment was delivered ordering that the originating application be dismissed – where directions were made for the parties to file written submissions as to the form of directions – whether the directions should prescribe timeframes for the receivers to take various steps – whether the directions should prescribe the manner in which a sum is to be distributed – whether the directions should require, upon distribution of the fund, steps to be taken to cause the trust to vest – whether the directions should provide for the receivers to have…